Data and Research October 25, 2017
40% of Retirees Discover That Health Care Costs Are Higher Than Expected
LIMRA says that retirees can expect to pay 13% of their income each year in retirement on health care and long-term care expenses.
Reported by Lee Barney
The LIMRA Secure Retirement Institute found, through a survey of 2,000 Americans between the ages of 50 and 79, and retired at least one year, that 40% had underestimated what they would face in health care costs.
LIMRA research has found that retirees spend at least 13% of their income each year on health and long-term care expenses. For someone spending $80,000 a year, this means $10,400 of that money would go toward health care.
Retirees also underestimated other costs, such as paying for basic living expenses. Twenty-five percent found these costs to be higher than expected. Twenty-three percent are experiencing higher than anticipated discretionary costs.
Having a plan for retirement didn’t help either, as 43% of those with a formal plan face higher than projected health care costs. LIMRA says it is critical for advisers to educate investors about these costs and to encourage them to open health savings accounts (HSAs), whose balances roll over from year to year and can come in handy during retirement.
Earlier LIMRA research found that people who own an HSA say these accounts are part of their retirement strategy.
LIMRA research has found that retirees spend at least 13% of their income each year on health and long-term care expenses. For someone spending $80,000 a year, this means $10,400 of that money would go toward health care.
Retirees also underestimated other costs, such as paying for basic living expenses. Twenty-five percent found these costs to be higher than expected. Twenty-three percent are experiencing higher than anticipated discretionary costs.
Having a plan for retirement didn’t help either, as 43% of those with a formal plan face higher than projected health care costs. LIMRA says it is critical for advisers to educate investors about these costs and to encourage them to open health savings accounts (HSAs), whose balances roll over from year to year and can come in handy during retirement.
Earlier LIMRA research found that people who own an HSA say these accounts are part of their retirement strategy.
You Might Also Like:
Products |
Product & Service Launches
ADP partners with Summer on SECURE 2.0 student loan retirement match; Voyant offers advisers retirement planning analysis for clients; Fidelity...
PLANSPONSOR Roadmap 2024: Defining Financial Wellness
Financial wellness means different things to different people but retirement plan sponsors should establish their company goals for their workforce...
Retirement Industry People Moves
Gallagher names new DB leader; Northwestern Mutual makes further moves in succession planning; National Institute for Public Employee Health Care...
« Xerox Wins Dismissal of Suit Over Financial Engines Offering